Drug pricing legislation will be high on the to-do list when the U.S. Congress returns from its August recess next week, as both the Senate and the House are expected to take action this month on competing packages of provisions aimed at controlling prescription drug prices.
What may get lost in all the politics and posturing is what that action may do to the burgeoning U.S. biosimilar market.
"Government intervention could really hinder what is becoming a thriving market," Chad Pettit, executive director for global value access and policy for Amgen Inc.'s biosimilars business unit, told BioWorld.
"Thriving" is not the word most lawmakers use to describe the biosimilar market. Their words of choice tend to be "languishing," "sluggish," "slow" and "disappointing." As a result, some of the measures in the House and Senate packages are aimed at jumpstarting biosimilar competition.
For instance, the bipartisan Prescription Drug Pricing Reduction Act, which the Senate Finance Committee passed on a vote of 19-9, seeks to encourage the use of Part B biosimilars by reimbursing each biosimilar for the first five years it's on the market at average sales price plus 8% of the reference biologic price instead of 6%. That reimbursement scheme could hurt the sustainability of biosimilars as it would favor new biosimilars over those already on the market. (See BioWorld, July 24, 2019.)
Such a policy would create an uneven playing field that would provide less incentive for biosimilars to compete on price, Pettit said. "A level playing field for competition is critical and something we need to maintain," he added. "Government intervention will actually hinder biosimilars."
Depending on how they would be implemented, proposals such as Medicare for All, direct Medicare negotiations, an international pricing index or drug importation also could undermine the biosimilar market and erode financial incentives for investing in biosimilar development.
Pettit attributed pessimistic misconceptions about the biosimilar market to the slow adoption of Pfizer Inc.'s Inflectra, which was launched in 2016 as the first biosimilar to Johnson & Johnson's (J&J) Remicade (infliximab.) By the end of June 2017, Inflectra had claimed slightly more than 5% of the U.S. infliximab market, a much slower start than had been expected. (See BioWorld, Sept. 21, 2017.)
As a result, Pfizer sued J&J in 2017, claiming that the company's exclusionary contracts for Remicade, a blockbuster autoimmune drug, and other anticompetitive practices violated federal antitrust laws and undermined the fundamental goals of the 2010 Biologics Price Competition and Innovation Act (BPCIA), which laid the legal framework for biosimilars in the U.S.
Two years later and with another infliximab biosimilar on the market, J&J's revenue from Remicade continues to slowly erode "due to increased discounts and modest share loss in the U.S." to alternative therapies and biosimilars, J&J said in its earnings report for the first half of 2019. Worldwide, Remicade sales were down 18.5% year over year, but just 14.1% in the U.S. – from more than $1.8 billion in the first half of 2018 to nearly $1.58 billion in the U.S. this year.
Rather than letting the infliximab experience portray the entire U.S. biosimilar market, Pettit said, "people need to step back and see the bigger picture." Nine years after biosimilars became a possibility in the U.S. under the BPCIA, the FDA rate of approvals is ahead of where the EU was during a comparable period after biosimilars were first approved there, he noted. And the rate of market uptake is roughly the same and expected to accelerate in the U.S.
As of July 31, the FDA had approved 23 biosimilars referencing nine different biologics. In comparison, the EMA had approved 18 biosimilars referencing six biologics in the first nine years since it began its biosimilar pathway in 2006. And a few of the early biosimilars authorized in the EU were approved as 505(b)(2) drugs in the U.S., because they referenced simple proteins such as insulin glargine and somatropin that had originally been approved as new drug applications.
Of the biosimilars licensed in the U.S., nine have launched, referencing six biologics – Avastin (bevacizumab), Epogen/Procrit (epoetin alfa), Herceptin (trastuzumab), Neulasta (pegfilgrastim), Neupogen (filgrastim) and Remicade. (See FDA biosimilar approvals, above.)
Some of those have had considerable success. For instance, biosimilars to Amgen Inc.'s Neupogen – Sandoz Inc.'s Zarxio, which launched in 2015, and Pfizer's Nivestym, launched last year – have claimed nearly 50% of the short-acting G-CSF market in the U.S. With Mylan NV's Fulphila launching last year as a biosimilar to Amgen's Neulasta, joined in January by Coherus Inc.'s Udenyca, Neulasta saw its market share reduced to 80% by the end of June.
"This marketplace is really taking off," Pettit said. Given the current approvals and the 77 biosimilar programs in development at the FDA, he predicted that over the next five years, U.S. biosimilar competition will deliver more than $150 billion in savings.
That will include biosimilar competition to Abbvie Inc.'s Humira (adalimumab), the biggest blockbuster to date. The FDA already has approved four Humira biosimilars, which are expected to launch in 2023 under agreements with Abbvie. (See BioWorld, Oct. 12, 2018.)